How Will COLA 2022 Impact My Social Security Disability Benefits?
The Social Security Administration (SSA) annual announcement about the Cost-of-Living Adjustment (COLA) rarely gets much media attention but this year’s spike is making headlines. The COLA for 2022 represents a 5.9 percent increase over 2021, and it will impact recipients of Social Security Disability (SSDI) and Supplemental Security Income (SSI) benefits. COLA is based upon the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which measures food and fundamental household expenses. If you have been experiencing the hit from inflation, you will see the higher amounts in December for SSI and January for SSDI.
However, at the same time, there are additional factors to note with the COLA increase for 2022. Inflation remains on the rise, even as your SSDI/SSI payments may go up. It is important to consult with a Maryland Social Security disability lawyer about the following points that take effect in the New Year.
Increased Social Security and SSI Benefits
For 2022, individual recipients of SSI benefits will receive $841 per month, and the amount for married couples is $1,261. The exact amount for SSDI recipients varies according to your work history, but the average recipient will receive $1,657 in 2022. Note that some individuals must pay federal income taxes on Social Security disability benefits. The key is your combined income, which includes:
- Your adjusted gross income;
- Interest income; and
- Half your Social Security benefits.
Unless you earn less than $25,000 as an individual or $32,000 total with your spouse, you will be paying income taxes.
Medicare Part B Premiums
Some recipients of Social Security disability may not see an exact 5.9 percent increase in their benefits, since premiums for Medicare Part B will also go up. In fact, from 2000 to 2020 Social Security benefits rose just 2 percent on average, while Medicare Part B premiums increased almost 6 percent. The relationship between the COLA increase and Social Security benefits has more of an impact on retired individuals with high net worth, as opposed to SSDI/SSI recipients.
Substantial Gainful Activity (SGA)
The amount of income you can make by working and still be eligible for SSDI/SSI benefits will increase to $1,350 per month. If you make more than this amount in 2022, you are considered as engaging in SGA. However, SGA is not a factor if you are a recipient of Social Security disability benefits and want to test the waters by going back to work. You can earn income at any level through the nine-month Trial Work Period and still qualify for benefits, and you have another safety net through the Extended Period of Eligibility (EPE).
A Maryland SSDI/SSI Attorney Can Provide Additional Details
As you can see from this summary, it is crucial to put perspective on any increase in Social Security disability benefits due to the 2022 COLA. To gain a better understanding of how your payments are calculated, please contact the Law Offices of Steinhardt, Siskind and Lieberman, LLC. We can set up a complimentary consultation at any of our four offices in Maryland.